The Bank of Korea's monetary policy committee held its base rate
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KEY POINTS:
- Twenty-one of the 27 analysts polled in a Reuters survey said the Bank of Korea would keep rates unchanged, but fourteen of the respondents who saw a hold said the bank would cut rates again.
- CHRONOLOGY
- Graphic http://link.reuters.com/hak95s
COMMENTARY:
YOON YEO-SAM, FIXED INCOME ANALYST, KDB DAEWOO SECURITIES
"We will have to observe the governor's press conference today. We thought (a cut) would take place around June but when we look at the government's economic stance, it looks like it will be difficult to just implement a rate cut without any additional policy changes. So I think a rate cut in Q3 would be right. A cut in the second quarter would be difficult."
PARK SEOK-GIL, ECONOMIST, JP MORGAN CHASE & CO.
"If we see the momentum coming back in the second quarter compared to the first, I think the base rate will be kept steady throughout this year."
"If consumer activity does not recover as expected in the second quarter, expectations for a rate cut may go up. However, I think there is a low possibility for the growth outlook to be that bad to adjust the base rate."
KIM JINA, FIXED-INCOME ANALYST, IBK SECURITIES
"I predict that there will be a rate cut in June or July, more likely in June."
"Politics are likely to be a more important factor in the next decision. The fundamentals are already bad, the fact that there is a new national assembly and that May will be the first meeting after the change in members will be more important."
MARKET REACTION:
Markets were mostly unchanged from previous levels after the Bank of Korea's decision.
The won
(Reporting by Christine Kim, Joyce Lee, Jee Heun Kahng, Nataly Pak and Hooyeon Kim; Editing by Tony Munroe)
